Thai billionaire, European brewer lose money in Sabeco investment deal
The Sabeco price has seen a strong recovery in the last half a year, but is still at a low price. Both Thai billionaire and the big brewer Heineken have lost money because of the drop in Sabeco share price.
According to Bloomberg, Heineken may sell 25.2 million SAB shares of Sabeco at the current market price of VND180,000 per share, a loss of VND4 trillion compared with the price peak since late 2017 and early 2018.
In late 2017, the Ministry of Industry and Trade (MOIT) sold 53.59 percent of SAB shares
Heineken, through Able Win Gain Lit and Heineken Asia Pacific, is holding SAB shares. In November 2019, Heineken Asia Pacific announced the selling 5.2 million SAB, the move leading to the ownership ratio decreasing from 1.2 percent to 0.39 percent.
With the move, Heineken is no longer a big shareholder of Sabeco, as its total ownership ratio has reduced to 4.32 percent.
Sabeco is a ‘big guy’ in the brewery industry in Vietnam, but has been facing difficulties recently because of the two outbreaks of Covid-19 and the Decree 100 which imposes heavy fines on drunk drivers. The enterprise reported a 31 percent decrease in profit in H1 to VND1.93 trillion.
Sabeco has set low business targets for 2020: revenue of VND23.8 trillion, a decrease of 37 percent compared with the previous year, and post-tax profit of VND3.25 trillion, a decrease of 39 percent. These are the lowest levels in the last five years.
Beer shops and restaurants have been hit hard by Covid-19. Meanwhile, the Decree 100 has changed Vietnamese people’s beer drinking habit. Some analysts predict that the volume of liquor and beer consumed in Vietnam in 2020 may decrease by 19 percent.
The State Capital Investment Corporation (SCIC) has announced a plan to divest all of its 36 percent of SAB, or 231 million shares. With the current price of VND180,000 per share, the State would be able to earn VND41.6 trillion, or $1.8 billion.
In late 2017, the Ministry of Industry and Trade (MOIT) sold 53.59 percent of SAB shares and got VND110 trillion, or $5 billion. At that moment, the price was very high, at VND320,000 per share. The buyer was Vietnam Beverage, the company related to Thai billionaire Charoen Sirivadhanabhakdi.
The Thai billionaire suffered the most in the Sabeco deal as the SAB price dropped sharply. The capitalization value of his investment in Sabeco has decreased by $2 billion as estimated by analysts.
ThaiBev has recently denied information about the sale of Sabeco’s brewery division and has also denied a rumour about the sale of SAB to a Chinese investor.
After taking over Sabeco in late 2017, the Thai billionaire began weeding out Vietnamese from key positions in Sabeco in a move to reshuffle the biggest brewer in Vietnam, which was completed in mid-2018.
Two Chinese Singaporeans hold the highest positions in Sabeco. Neo Gim Siong Bennett is now the CEO of Sabeco, while Koh Poh Tiong has been the chair of the board of directors since July 2018.
A number of commercial banks are going to list their shares at the HCM City Stock Exchange (HOSE), and are expected to bring a breath of fresh air to the market, which has been stagnant because of the pandemic.
Commercial banks are facing challenges, including an increase in bad debts because of Covid-19 and pressure that has forced them to increase charter capital. But bank shares remain attractive to investors.